Category: Mexico

Mexico’s government has announced a MXP4.5bn highway project to connect the southern city of Oaxaca to the coastal resort towns of Huatulco and Puerto Escondido. The 283km road will finance the project with a combination of public and private investment from the new MXP270bn National Infrastructure Fund. A bidding guide will circulate next month, the government says, with a winner to be chosen by the end of the year. The government aims to have the highway completed by 2010. It expects about $2bn will be spent on 14 projects in 2008, and launched in February the Pacific Package, a follow up to last year’s highly successful FARAC toll road auction, which incorporates some existing roads and greenfield projects. The second round of FARAC toll roads will be auctioned in June, according to a banker whose shop hopes to bid.

Mexican quasi-state housing fund Infonavit plans to sell up to MXP3bn in 2030 mortgage-backed bonds April 9. The issue is the first from a new MXP15bn program. The issue is scheduled to coincide with pension fund changes, according to a banker on the deal. The most notable alteration is the “corte transversal,” which allows division into five funds based on employees’ age group, with increasing degrees of aggressiveness. Banamex and Deutsche Bank are managing the mxAAA rated sale.

Moody’s has affirmed Mexican derivatives clearing house Asigna at A1 on the global local currency issuer scale with a stable outlook. The agency notes that credit quality is primarily tied to that of its owners, BBVA Bancomer, Banamex, Banco Santander, Scotiabank Inverlat, and JPMorgan. The ratings are limited by the nature of a still developing derivatives market in Mexico and the fact that Asigna remains a young organization with only 10 years of operation.

Mexico’s Empresas ICA has acquired the Consorcio del Mayab highway concession in the Yucatan peninsula for MXP870m. It will also assume MXP2.1bn in debt associated with the project. Mayab operates the 242km Kantunil-Cancun highway running between Cancun and the state capital Merida. The 30-year concession on the toll road runs to 2020.

Mexican electric utility CFE has made little progress on a $2bn 3-year senior revolver it launched roughly a month ago to arrangers. So far, the facility, which pays 40bp over Libor, is heard to have secured $100m commitments from just two MLAs. One of those is SocGen, say bankers away from the process. Fees for $100m tickets are 30bp, and for $150m tickets, 35bp. “Not everyone in the market is happy with the pricing,” says a banker close to the syndication. Indeed, a thin margin is heard to be the main cause for slow going on the transaction, in addition to harsh market conditions that jacked up the cost of funds for many banks. “Pricing is the rub for CFE,” says a banker whose shop is considering participating. While CFE is offering to pay well over the 25bp above Libor it sought last year, the margin is still viewed by many as tight given market conditions. The tension is healthy for the market, whose participants seek fresh benchmarks. A banker on the CFE transaction says he believes the deal will get done, and has managed to secure several statements of intention to commit from other banks. BBVA, RBS, BNP and Santander are bookrunners, with Citi also participating in a senior role. MLA commitments are heard due next week, with retail participation due in two weeks. The high grade borrower may have to play the relationship card, especially since Vale is sucking $50bn in liquidity out of the market to support its purchase of Xstrata.

Telefonos de Mexico has filed plans for a new fixed- and floating-rate bond offering under the MXP10bn shelf it filed in December. No information was given on the size or the tenor of the transaction, which it expects to place in April. Inbursa is managing the sale.

Frequent peso issuer GMAC is considering returning to the Mexican market. “Right now we’re just having conversations,” a GMAC official tells LatinFinance. He adds that Mexican pricing has only flared by around 15bp in the recent credit turmoil, making that market still attractive for long term fund raising.

Scotiabank Inverlat priced MXP2.5bn in RBMS due 2028 at 9.15%, wide to the 8.95% it had targeted. The transaction was about 2.5 times oversubscribed, according to a banker managing the sale. The issue is the first from a MXP10bn shelf and the largest RMBS transaction in Mexico so far this year. The pool of 2,750 mortgages originated by Scotia comes from throughout Mexico, with just over a third from DF. Scotia managed the sale.

Private equity firm Advent International expects Mexican portfolio company Milano to be ready to go public in the first part of next year, Alfredo Alfaro, a partner at the firm’s Mexico office, tells LatinFinance. Based on analyst valuations for the sector, Alfaro predicts an offering would be worth $250m-$300m. While several banks have already approached Advent for the mandate, he says none have been selected to take the deal to market. Milano introduced its new CEO, Luz Maria Gutierrez, at an event Tuesday in Mexico. She takes over two years into Advent’s acquisition of Milano, during which the company restructured and acquired Melody, a deal completed in June 2007. Advent has $150m in equity invested in Milano, with an additional $180m in debt.

Mexican paper producer Durango plans to raise MXP907.3m through a stock sale to existing shareholders. Shareholders have approved a proposal to sell 110.6m units at MXP8.20 each, and have 15 days to exercise the right. It last raised funds in October via a $520m bond issue, and has said it plans to repurchase some of its expensive bond debt in 2008.